Social Media impacts every business, every brand, and in doing so, connects a network of distributed communities of influence, making the world a much smaller place in the process. Small businesses are in fact at an advantage in Social Media Marketing as they can focus on hyper-local activity that can offer immediate rewards or at the very least, the real-time feedback or lack thereof says everything about next steps.

A recent survey conducted by Citibank offers a contrary point of view, citing small business executives who believe social networks offer no benefit or promise to expanding their business. This isn’t all that uncommon however. The truth is that without knowledge or direct experience, it’s virtually impossible to envision the potential of something where they’re most likely absent as a consumer themselves.

But, if a conversation takes place online and you’re not there to hear it, did it actually happen?

Of course it did…and it continues – with or without you.

The “I” in ROI does not stand for ignorance. It does however stand for investment and in cases where new media is “new,” it also stands for intelligence. We’re learning together and that’s both an opportunity and an impediment. We need guidance to better understand the promise and also how to reap its reward.

Ad-ology published its “Small Business Marketing Forecast 2010″ report that revealed that among the other benefits of social media, lead generation is the biggest benefit of online networking. Other benefits ranked as follows…

Keeping up with the industry

Very Beneficial: 16%
Somewhat: 29%
Not Beneficial: 55%

Monitoring what is being said about your business

Very Beneficial: 16%
Somewhat: 28%
Not Beneficial: 55%

Generating leads

Very Beneficial: 16%
Somewhat: 34%
Not Beneficial: 50%

Competitive intelligence

Very Beneficial: 14%
Somewhat: 29%
Not Beneficial: 57%

Improving customer experience

Very Beneficial: 12%
Somewhat: 29%
Not Beneficial: 59%

Resolving problems

Very Beneficial: 11%
Somewhat: 22%
Not Beneficial: 67%

Finding vendors/suppliers/partners

Very Beneficial: 10%
Somewhat: 28%
Not Beneficial: 62%

Recruiting for new employees

Very Beneficial: 8%
Somewhat: 19%
Not Beneficial: 73%

Background checks – employees, suppliers, etc.

Very Beneficial: 7%
Somewhat: 20%
Not Beneficial: 72%

Among those surveyed, Facebook appeared as the most beneficial social network. Perhaps tied the reverberation of activity across social graphs. LinkedIn, while cited less often, ranked just below Facebook, but ahead of Twitter – for now at least.

Facebook

Very Beneficial: 10%
Somewhat: 23%
Not Beneficial: 14%
Do not use: 53%

LinkedIn

Very Beneficial: 6%
Somewhat: 15%
Not Beneficial: 13%
Do not use: 67%

MySpace

Very Beneficial: 6%
Somewhat: 11%
Not Beneficial: 15%
Do not use: 68%

Twitter

Very Beneficial: 6%
Somewhat: 13%
Not Beneficial: 12%
Do not use: 69%

YouTube

Very Beneficial: 5%
Somewhat: 10%
Not Beneficial: 12%
Do not use: 73%

The study shows that education and awareness are needed among small businesses to better understand the promises, advantages and the commensurate commitments necessary to generate visibility and ultimately the activity necessary to sustain or at the very least, contribute to a lucrative and growing business.

31 percent of small businesses claimed that their primary hurdle was the perception that “our customers do not use social networks.” Equally, business owners complained that they do not have the time or resources necessary to run an effective social media marketing campaign. Sound familiar?

While yes, it’s true, small business owners must focus on the core products, services, and values of their business. However, without visibility, customers do not possess the information necessary to connect the dots between their want or need and you.

The Top 10 Ways to Monetize Real-Time Conversations in Social Media

No story is complete without providing ideas to move forward and compete for the future. By competing for the future, we also cultivate a flourishing state of “now.” One of the primary advantages of social media for small businesses is the relatively low cost associated with uncovering relevant conversations within your geographic or service area. It’s how we can identify and personally connect with customers. It’s how we learn what they’re seeking. It reveals interests and cravings.

For example, take a moment to run a real-time search activity search using Collecta to get a feel for the volume and velocity for relevant conversations online. Then, run a local search on Twitter (choose by geography) using a keyword related to your business, but not necessarily that of your business or product name. For example, Pizza, Coffee, and local yogurt shops are searching those words specifically to offer specials and free items to those within proximity to stop in and give it a try. Business owners report that while offers and freebies reflect a notable investment, they always increase clientele and business overall.

To help entrepreneurs and small business owners capitalize on the “now” or real-time conversations populating social media, Web 2.0 investor extraordinaire Ron Conway offered his vision for the top 10 ways to monetize real-time conversations.

New mobile social networks such as FourSquare, Loopt, Gowalla are also emerging that connect people within local areas based on where they are and what they’re doing. These services require you to “check in” to a location or an establishment and as such, local businesses are encouraging patrons to do so by offering incentives, “check in here on FourSquare and get a free slice of pizza or a free beer.” Why? Each time someone checks in, their social graph follows the establishments they frequent and as such, brands the venue within a very trusted circle. There are also opportunities for paid sponsorships. Each time I check in to venues in Redwood City, a local wine shop and tasting room, Savvy Cellar, pops up with a “nearby special.” If I pop in and show my iPhone with the special, I receive 50% off any tasting. Brilliant.

To learn more about specific examples for increasing awareness and revenue using Social Media, please read Forbes’ piece on 21 Top Twitter Tips (Story | Through Pictures)

Hi Brian. Really interesting stats. I think the face these questions were pre-loaded with 'social media' in front of them, resulted in the surprisingly low 'very beneficial' percentage. As Erik Boles points out (very well), if there is the initial explanation to small business owners of how social media can tie in with their business objectives, what they can expect to get out if it, what resources it takes etc then it can become another marketing tool in their armoury. I am sure, if asked, all those business owners would put Improving Customer Service, Generating Leads, Intelligence etc as 90-100% important…they just aren't seeing how social can help the process. I blame the name 'Social Media'…we really need a new one for 2010!

http://www.internetbusinesspath.com/ Tyrone

Social media for me should be then not only stressed to communication, interaction between users and growing more numbers of followers but how these relationships build in connections that helped you enhance the business. Indeed, it's not only a starting point but can also be considered as product of people's interests which should be targeted by marketers. Thanks for sharing the great ideas!

Those that don't believe in the importance of social media probably have not tried it first hand and/or fall prey to the belief that sites like Twitter are about not much more than telling people what they ate for breakfast.

Social media tools can be used to drive business results, but you have to get your feet wet…..

Good post.

http://bigtimedesign.ca/radar Dave

Our experience has been that small business owners have to think about everything and this is just something that slips past them. Once they hear about social media marketing, how easy it is, how little it takes and how cheap it is, they immediately get it. They aren't idiots, after all. They just have WAY too much on their hands at the moment.They especially understand that social media alone doesn't always work for small business, and that being able to quickly connect with multiple networks with one message means speaking to the greatest number of potential customers with the least effort.Of course, if they can get a decent social media marketing tool and some expertise on the cheap, that's even better. Like Erik mentioned, not all of them have the resources to get access to the real gurus when they need it.

Great data. Regarding the YouTube/online video angle, I wonder if small businesses aren't using video sharing sites because the sites are too broadly targeted. Without a doubt, web video marketing does increase audience engagement and is especially effective for lead generation. While video sharing sites may ultimately help with website SEO, small businesses may ultimately find it more beneficial to incorporate video into contextually relevant areas of their websites and to use online video in direct communications capacities. The audiovisual nature of video presents an effective way to tell a story that can educate prospects and convert leads into customers.

Hello Brian & commenting friends. I welcome this post for the topics and discussion it ignites. I think there's a few reasons quite rightly pointed out by folks why we aren't seeing more adoption by small business, which are predominately in my view, because of a lack of awareness and education about how SM can be put to practical use to deliver.

@EdHartigan picks up on a gem of a point which I believe when he says that: “I am sure, if asked, all those business owners would put Improving Customer Service, Generating Leads, Intelligence etc as 90-100% important…they just aren't seeing how social can help the process.”

There is the assumption made by people here that SM is for everyone and while I think that largely this is true in some shape or form, Jeremiah Owyang mentions that implementing a full blown SM campaign as large part of overall marketing activity does not apply to all – something which I also agree with. I wonder where the line is drawn to determine whether to allocate resources to SM or traditional forms, what small business owners should be looking at in their analysis to determine viability (500 forum threads / blog posts, 5000, 50,000, etc?), how many discussions qualify SM implementation and so forth.

I read many articles, blogs, comments and so forth about the merits of SM, the planning process, launch cases, integration, implementation mechanics, metrics and so forth but as a small business owner I find it difficult to work out a dependable plan that I know will generate whatever amount of return. Erik Boles would say that I haven't done my planning, but until I actually execute and measure a SM campaign, it appears to be more very difficult to estimate return even within a range which makes it difficult to commit to implementing SM, especially where the net is rife with the skeletons of empty Twitter and Facebook accounts.

Very often the cases I find are in completely unrelated markets, give only a small glimpse into strategy, their market and do not report actual results over time – I'm missing the meat and transparency to gauge success even if it is in a completely unrelated industry.

http://amymengel.com amymengel

It would be interesting to see more demographics on the types of small businesses surveyed and their owners. Many small businesses are currently run by Baby Boomers, who are often on the late adopter side of the innovation curve. I wonder how much of these results are a generational/age issue.

http://www.flashtweet.com/ Nicole

Nice study – Thanks for the info! Small businesses as a whole have yet to see returns on social media efforts, but we've also seen it be very rewarding for some. We think the key is to stick with it… And we blog about it often!

Brian, I just told everyone that I wish I could take that line you wrote – The “I” in ROI does not stand for ignorance – and put it on a shirt. SMedia ROI is THE topic this week. Todd Defren, DM Scott have also been talking about it.

There’s a big debate as to whether ROI can really be determined in Social Media campaigns and programs, and that makes It tough for many PR and Social Media consultants who are still trying to convince clients of SMedia benefits.

I think the best (and first) way to prove to yourself and your clients that Social Media is worth while for their particular industry/company is to FIRST monitor the web – “Who’s talking about you?”–The answer to that question may better justify the decision to engage with one’s online audience than any measurements. One thing Executives hate is a published complaint (“negative press”). Who would pass up an opportunity to learn how to respond to this audience/complaints/debates? Maybe the issue of ROI comes second. Maybe vanity is an easier leverage point when convincing people of SMedia boons.

Thanks for the post, I loved your last one too btw, the one on The Predictive Web. Great Read.

http://www.vladimiroane.com Vladimir Oane

31 percent of SMB claimed that their primary hurdle was the perception that “our customers do not use social networks” . This is by far the highlight of the article.

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ABOUT ME

Brian Solis is a digital analyst, anthropologist, and also a futurist. In his work at Altimeter Group, Solis studies the effects of disruptive technology on business and society. He is an avid keynote speaker and award-winning author who is globally recognized as one of the most prominent thought leaders in digital transformation.

His most recent book, What's the Future of Business: Changing the Way Businesses Create Experiences (WTF), explores the landscape of connected consumerism and how business and customer relationships unfold in four distinct moments of truth. His previous book, The End of Business as Usual, explores the emergence of Generation-C, a new generation of customers and employees and how businesses must adapt to reach them. In 2009, Solis released Engage, which is regarded as the industry reference guide for businesses to market, sell and service in the social web.